A number of innovative new securities products have been introduced over the years. For example, the introduction of a variety of novel types of mutual funds have allowed investors to participate in diversified portfolios of equities, bonds, and other securities. More recently, Exchange Traded Funds (“ETF”) have been introduced. Generally, an ETF is a fund that tracks an index, but can be traded in the market like a stock. Investors can trade shares of an ETF like stocks and can use the same strategies in trading ETFs that traditionally have been used with respect to stocks, such as selling short, buying and holding for the long term, etc. Because ETFs are traded on stock exchanges, they can be bought and sold at any time during the day (unlike most mutual funds) and their price may fluctuate from moment to moment, just like any other stock's price. Investors will also need licensed brokers in order transact in purchase them, which means that a commission will usually be charged.
Unfortunately, ETFs have not, to date been structured to allow an investor to invest in commodities or futures. Currently, investors may make pooled investments in commodities by purchasing interests in “commodity pools,” which are similar to mutual funds except that they are primarily engaged in investing and trading in futures contracts or options on futures, rather than securities. In some situations, commodity pools have been created in which shares were offered to the public (i.e., shares in the pool were registered under the U.S. Securities Act of 1933). These commodity pools provide desirable benefits to the investors who participate; unfortunately, however, they do not provide a mechanism for shares to be publicly traded. It would be desirable to provide an ability to publicly trade commodities using a listed equity. More particularly, it would be desirable to provide an interest in a commodity pool that is publicly traded and listed on a securities exchange.